Introduction and Explanation of Why you MUST Answer a Foreclosure Complaint New Jersey is a "judicial lien theory" foreclosure jurisdiction.
That means that in New Jersey YOU own your home and the bank has a 'lien' on the property (the mortgage) and it also means that the bank cannot take your home from you without first going to Court and convincing the Court to issue a Final Judgment in Foreclosure.
That means that by Answering the Complaint, you are forcing the bank to go through the whole process, just to try to take your home from you.
If you do not Answer the Complaint, you are giving up almost all of your rights. Don't do that. 2020 Summary - The Foreclosure Process, Step by Step, with Guidance and Advice - Part 1 1. Default - the mortgage servicer of the mortgage loan (the company that sends you monthly statements) has the right, per the Truth in Lending Act [a federal statute], to declare the mortgage loan in default if the borrower goes 90 or more days late. That is why the servicer refuses to take payment and instead 'accelerates' the loan.
- Guidance: Keep careful track of servicer demands regarding 'escrow items', meaning taxes and insurance. If the servicer claims that you have not paid the insurance, but you have paid directly to the insurer, alert the servicer in writing of the payments. You may create a Psaros claim.
- Guidance: If you modified the mortgage and the servicer refuses to honor or acknowledge the modification, this is not a matter you can handle on your own. Collect the following four pieces of information and bring them to a consumer attorney: a) the Trial Modification Program offer, b) proof of your payments, c) proof you signed and returned the TPP (if required) and d) evidence of the bank dishonor/refusal to modify the mortgage loan.
2. Lis Pendens - The lis pendens is a document that the mortgage servicer records in the County Clerk's office against your home that alerts anyone reviewing real property records that your mortgage has been accelerated. This is not published anywhere else but the County Clerk office. It is unlikely your friends, neighbors or family will know of it.
3. Notice of Intent to Foreclose [NOI] - this is a document that the mortgage servicer is required by the Fair Foreclosure Act [FFA], a state statute, to send you AFTER default and BEFORE filing the foreclosure complaint. It will include a) The name of the mortgage loan owner, b) the name and address of the mortgage loan servicer, c) the amount that the mortgage servicer claims is necessary to bring the mortgage loan current [this number should be very carefully reviewed for any mistakes by the servicer] and, most importantly, d) it will include a notification that you have a right to dispute the debt.
- Guidance: It is important to dispute the debt, even if you think the amount is probably correct. It will not only likely extend the process at the cost of a single letter, but it may reveal errors about which you had no prior information.
The bank must wait at least 30 days from delivery of the Notice of Intent to Foreclose on before it can proceed.
3. Foreclosure Complaint - This is the lawsuit filed by the mortgage servicer against you to try and take your home. You have 35 days from the date you receive it in order to Answer the Complaint. Answering the Complaint should ALWAYS be done.
Guidance: Some bankruptcy and other attorneys will tell you that it is not necessary to Answer the Complaint, or that they do not provide that service. DO NOT USE THEM. You waive many of your rights if you do not Answer the Complaint.
4. Case Management Conference - Within 60 days of the filing of the Answer, the Judge handling the case will Order that everyone attend a conference to discuss the case.
- Guidance: This is an opportunity to request a delay and slow down the foreclosure suit.
- Continued in Part 2 ... 2020 Summary - The Foreclosure Process, Step by Step, with Guidance and Advice - Part 2 5. Discovery/RESPA analysis - This is a period of time, usually 60 days, for a borrower to demand information from the plaintiff in the foreclosure case to test whether the Bank has the right to proceed.
- Guidance: A competent attorney will probe weak points in the plaintiff's case, which generally involve mortgage servicing mistakes. It is possible, but highly unlikely, that there will be a problem with the Plaintiff's ability to convince a Court that it does, in fact, own the mortgage. (Websites that claim you should pursue the 'Produce the Note' defense abound. Ignore them.)
- Guidance 2: The RESPA analysis is a right available to all consumers, a right provided by RESPA, a federal law. A competent foreclosure defense attorney will demand complete mortgage servicing records via RESPA requests - this information will far exceed the information allowed to be demanded in the foreclosure litigation - and will allow the attorney to do a thorough and complete evaluation of the history of the loan. In foreclosure litigation, there are few attorneys who take this step, but this process is where 70% of all defenses and claims lie. A RESPA evaluation is absolutely required.
6. Motion for Summary Judgment: At some point, the mortgage servicer will file a Motion for Summary Judgment which will ask the Court to enter an Order granting the request without a trial. The plaintiff will argue there is no reason to dispute that it owns the mortgage and Note and that the Note is in default.
- Guidance: Whether this motion should be opposed should be decided by an attorney and, if an opposition is warranted, it should be prepared by competent counsel. If, at the time that the motion is filed, the review of the discovery and the complete RESPA evaluation reveal that there are no meritorious defenses to the foreclosure, a mortgage servicer will nearly always agree to a 60-90 'hold' on the foreclosure litigation in exchange for the borrower's Consent to enter the motion.
- Guidance 2: This is important, especially if the goal is time in the property. If the mortgage servicer will agree to a 90 days delay, then by responding timely to each step of the process, the borrower can add seven months to the foreclosure litigation. And yet, nonetheless, most people do not Answer the Complaint. Do not become a statistic. Defend yourself.
7. Notice of Final Judgment: The Fair Foreclosure Act [FFA] is a state law that requires the bank to notify the borrower of its intention to file for Final Judgment. This must be delivered to the borrower. If it is not, the foreclosure may not proceed.
- Guidance: This notice provides that if a borrower can in good faith state that it believes it will be able to reinstate the debt, the bank must not file for Final Judgment for another 45 days. Modification is a mechanism of reinstatement. This is an excellent time to apply for a modification of the mortgage loan. The 45 day delay, plus the delay in processing the modification application, and any appeal, will further delay the foreclosure by months.
- Continued in Part 3 ... 2020 Summary - The Foreclosure Process, Step by Step, with Guidance and Advice - Part 3 8. Motion for Final Judgment: This is a motion to the Foreclosure Clerk that requests the Judge to enter a Final Judgment for a specific amount. There is only 10 days to respond from the date of receipt of the Motion. If there are errors, and valid objections are raised to the motion, a hearing will be scheduled which will delay the foreclosure by at least another month, likely more depending on how busy the foreclosure calendar in that County may be.
- Guidance: The case, Psaros v. Green Tree Servicing, LLC, described in the Important Cases section, was a case we won holding the plaintiff's ATTORNEY personally responsible for suing for more money than the foreclosing plaintiff was actually owed under the mortgage note. READ THE MOTION FOR FINAL JUDGMENT calculations very very carefully. If there is a mistake, an FDCPA analysis MUST be conducted, AND an opposition to the motion filed.
9. Final Judgment and Writ of Execution: The Final Judgment is the amount of money that the bank is entitled to try to collect from the sale of your home, according to the Court. The Writ of Execution, which sounds scarier than it is, is the document that gives the Plaintiff the right to give to the County Sheriff to list your home for sale. Depending on the County and the time of year, it will take the sheriff usually between 2 and 6 months to get around to scheduling your property for sale.
- Guidance: The sheriff must give you Notice of the sale. They do not always do what they are supposed to do, so keep track on the sheriff's website of the situation. You - thanks to the new laws signed by Governor Murphy earlier this year - have two 30 day adjournments of the sale, thereby extending the process another 60 days.
10. Post-sale: After the house is sold, if it is sold, the new owner (almost always but not always the bank) owns the property and must either work out with you - usually for a payment of less than $3,000 - a move out and broom clean date, or file a motion to the Court to Order the Sheriff to evict you.
- Guidance: Eviction is really unpleasant. Do not get evicted. Plan ahead and find a resolution for new housing before it gets to that point. Courts, by the end of this protracted process, are reluctant to extend evictions. Do not be evicted.